An LLC is a popular business type offering the liability protections of a corporation without the formalities typically required of corporations. If you have filed to become a corporation or LLC, you have already registered your business name and you don’t need a DBA. Howbeit, you will need to get a DBA if you intend to conduct business using a name that is entirely different from the name filed with your LLC/corporation paperwork.
A single LLC entity can operate with multiple businesses using a DBA. But have it in mind that for a DBA to be used legally by business owners, they are expected to register the name in accordance with state laws where the business operates. A penalty is imposed on businesses when they fail to register a DBA prior to operations.
Since multiple DBAs can be registered under a single LLC, each of the DBAs need to be registered separately. Note that one of the imposed rules on using DBA is to ensure that there will be no two businesses having the same DBA. Furthermore, some state laws mandate that a DBA should only be registered once in a state with a state-level registration system.
In addition, for LLCs and DBAs to continue their operations, they need to comply with state laws to ensure proper maintenance. Have it in mind that some states have added requirements such as filing a Biennial Report in Iowa or an Annual List in Nevada. Failure to comply might lead to the forfeiting of rights to business or monetary penalties.
DBAs are also only valid for four to five years but need to be renewed upon its expiration to ensure that other businesses won’t use it. Also be wary when using a DBA in conjunction with an LLC for you not to confuse the usage of the business’s legal name (LLC) and the assumed name (DBA).
Note that this is very important since a DBA doesn’t provide a personal liability protection and an individual might find himself responsible for business debts if legal documents are sealed in a manner that confuses whether you or the LLC is using the DBA.
Why Would an LLC Need a DBA?
Filing a DBA sounds like a lot of daunting paperwork, however there are actually important reasons to get your DBA in order:
You Can Operate Multiple Businesses
For LLCs or corporations, a DBA will allow you operate more than one business without having to form a separate LLC or corporation for each one. For instance, imagine Martins wants to get into landscaping design, contracting, tree maintenance, and snow removal.
He can register a corporation with a relatively generic name and use a DBA for each individual business. His sub-DBAs could include “GreenDream Landscape Design,” “Green Way Tree Maintenance,” etc. This will cut down on his paperwork and expenses when he’s operating multiple projects.
To Stake a Claim on Your Business Name
When you file a DBA, you are also announcing the name you have selected to the world by putting it on the public record. In some states, a DBA filing doesn’t prevent another business from registering the same name, however it is worth checking if that is the case in your state. It could save a lot of problems later.
You Want a Creative or Distinctive Company Name
Martins Flinch is a perfectly fine name, but Green Dream Landscape Design buttresses a clearer image of greenery and industry. Many companies tend to give their businesses a name that matches the product or service they provide.
From results, no one can blame Elon Musk for naming his business after pioneering engineer Nikola Tesla, or Sara Blakely for the clever and oddly evocative Spanx business name. Imagine if they had started with “Elon’s Electric Cars” or “Constricting Underwear for Women,” they could have used a DBA to continue running their original businesses with their new and improved names.
DBAs Keep Your Business Compliant
As an LLC or corporation, you enjoy certain legal protections. However, these protections may be invalidated if you are operating under a different name and didn’t file for a DBA. For instance, Martins may have incorporated Green Dream Landscape Design, but if he signed a client contract under simply Green Way Tree Maintenance (or some other variation), that contract may not hold up in court.
You Want to Capture a Different Market under a New Domain Name
Online sales can be massive and attractive for any business. However, instead of trying to make one website be everything to everyone, you can segment your online market by filing DBAs for different subsets of products or services.
Therefore, you can create separate websites specifically targeting customers with different needs, (e.g., LandscapingTools.com, TreeRemoval.com). You can have as many fictitious names as you like (within reason) all under one business roof.
Facts about Filing a DBA in the United States
Have it in mind that the rules, requirements, forms, and fees associated with filing a DBA tend to vary in each state and county. The U.S. SBA offers a chart that notes DBA filings state-by-state. The DBA forms may differ as well. The time it takes to process a DBA also varies. It is best to learn how your state or county operates. Nonetheless, here is some additional information on filing a DBA:
Changes You Make May Impact Your DBA
If the information in your DBA filing changes (e.g., you incorporate or become an LLC, relocate your business or appoint a new partner, officer, or member), you may need to revise your DBA. Most states in the United States require businesses to file an amendment. Others require a whole new registration. Ensure to keep your DBA up to date.
Since you already have an LLC, you may be asked for proof that your business is in good standing. You can request a Certificate of Good Standing from the secretary of state. There are several businesses that will prepare and file the necessary forms for you. (Googling “Certificate of Good Standing” will narrow down the list.)
You Can’t Use Inc. or Corp.
Have it in mind that you can’t add Inc. or Corp. to the end of your DBA (e.g., Green Thumbs McGee’s, Inc.) if your business is not incorporated. Same goes for an LLC.
Announcing Your DBA
You may be mandated by your state or county to announce your DBA by putting an ad in a local newspaper so the public can be made aware of your filing.
Payment and Filing Methods Vary
Payment and filing methods for DBA vary by state/county. Note that some states in the United States let you pay by debit or credit; some require a money order or cashier’s check. Filing can be done online in some states while others want you to mail notarized documents to their offices. Check with your state/county office to be sure.
Consider Applying for an Employer Identification Number
To avoid using your social security number to identify your business, it is imperative you consider applying for an employer identification number. Note that this will help keep your personal and business matters separate.
DBAs Need to Be Renewed
In many states, a DBA registration are expected to be renewed every five years or so. Make a note to file for renewal before it expires so you can continue to legally operate your DBA.
Indeed, a DBA can be a powerful part of your business strategy. Consider ways that a fictitious name can help you build, branch out, or even simplify the way you operate. However, one way to make the DBA filing process easier is to hire a legal document filing service to help make sure that you are following your county and state requirements perfectly. Whatever method you prefer, you won’t be able to begin using your DBA until you receive a fictitious name certificate.
Frequently Asked Questions
1. What Are The Risks Associated With DBA?
The risk associated with DBA are;
- The need of migrating to the cloud
- The need to upgrading to latest technology
- The need of an improvement in performance
- The ability to manage larger estates
- The need of managing more frequent deployments
How Much Does Registering A DBA Cost?
To register a DBA, there is no specific price because the fee varies, depending on the state’s rules. But the price range is usually between $5 and $50.
What Are The Advantages Of Having A DBA?
The advantages of having a DBA are;
- For flexibility sake
- It assures Protection of Privacy
- It adds more values
- It is affordable and ease
- For versatility sake
- It has low cost
- It makes banking process easy
Who Should Consider Filing For A DBA?
Sole proprietors, partnerships, limited liability companies or corporations can all consider filing a DBA.
What Are The Benefits Of A DBA Degree?
The benefits of a DBA degree are;
- It provides an opportunity for a numerous job options
- It gives you privilege to be a social scientist for business organisations
- It opens more opportunities learn about science connection to science
- Higher salary prospects
- Gives you the entrepreneurial boost
- It gives the privilege to research about the field
- It gives free access to tour around the world
What Is The Difference Between An LLC And A DBA?
The difference between a DBA and an LLC is the liability protection. Because Under a DBA, there is no distinction between the business owner and the business. While an LLC provides limited liability protection which means that the business owner’s personal property is completely separated from the business.
What Are The Advantages Of Filing A DBA Name?
Some of the advantages of filling a DBA name are;
For privacy protection
Enhancement of business value
For the benefit of business structures
8. Please Can You Use Memo Me As Your Trading Name Or DBA?
No! It is not proper to use a memo as a trading name or DBA because a name is required to be written exactly the way it was used in registering at the Secretary of State.
9. Does A DBA Offer Any Legal Protections?
No! A DBA registration does not offer legal protection. It only gives the ability to operate under a fictitious name.
10. If You Have An LLC, Do You Still Need A DBA?
You may not need a DBA if you have an LLC, provided an LLC does business under its own name, there is no point to filling a DBA. Except in a situation where the LLC owners decide to change for business, this is where a DBA may be required.
11. What Is A DBA, Or Fictitious Business Name?
A DBA is any registered name that a business operates under that is legalized. It is also known as a trade name or fictitious name.
12. Why Would A Partnership Need To File A DBA?
A partnership would need to file a DBA for the reason of protecting the personal names of the general partners. Because the business may be elected to operate under a DBA as an alternative which may require using the personal names of all the partners to open a business bank account.
13. What Is The Difference Between DBA, LLC And Sole Proprietorship?
The difference between DBA, LLC and A sole proprietorship is; a sole proprietorship and LLC are legal structures. A DBA is a legal requirement to operate your business with a trade name which differs from your registered legal name.
14. Can An LLC Or A Corporation Own A DBA?
Yes, because a DBA operates much like a personal nickname (an acronym) which you may use your for some reasons, and use your full legal name for other vital matters.
15. How Do You Set Up A DBA As A Partnership?
You can set up a DBA as a partnership by considering the following tips;
- Establish liability insurance for the business with DBA to protect each partner in case the business is sued before the company can incorporate
- File the partnership under the company name with a DBA certificate or the local government business office
- Hire an attorney to discuss a partnership agreement
- File a legal structure for the business with the state
- Review the corporate guidelines or partnership agreement each year.
16. Why Would A Sole Proprietor Need To File A DBA?
A sole proprietorship would need to file a DBA because a sole proprietorship and partnership are not separate legal entities from their owners, they need to file a DBA unless they want to run the business under their own name alone.
17. How Do You Set Up A DBA As A Sole Proprietorship?
You can set up a DBA as a sole proprietor following these tips;
- Look out for the DBA available names
- Submit an application for the DBA
- Get a state business license
- Posses the necessary licenses or permits
- Register with the state tax department
- Apply to have an employer identification number
18. Which Type Of Businesses Can Benefit From A DBA?
A sole proprietor and a partnership business can benefit a lot from DBA.
19. What Type Of Businesses Are Best Suited For A DBA?
Businesses which suit best for a DBA are Sole proprietorship and partnerships, reason is because these types of businesses may default in name like the surname(s) of the owner(s), unless otherwise ratified in a DBA filing.
20. Can You Change A DBA To A Limited Liability Company In Texas Online?
Yes, you can change DBA to LLC in Texas. But it will requires you separating your personal assets from the company’s assets.
21. Do You Need A Tax Id Number For A DBA?
Yes, tax identification number is needed for a DBA because filling the form may require an employers identification number for authenticity.
22. How Do You Set Up A DBA Under An LLC?
The following ways are how to set up a DBA under an LLC;
- Choose a right business name for your DBA
- Register the name you wish to operate with
- Get any valuable business licenses
- Publicize your new DBA
- Consider the trademark of your DBA name
23. How Do You Set Up A DBA Under A Corporation?
To set up a DBA under a cooporation, you need the following guidelines;
- Fill out and submit a DBA form on their web site
- Sign all the required documents and send back to an express mail provided
- Provide your receipt with the required government agencies
24. Why Would A Corporation Need To File A DBA?
The reason a corporation needs to file a DBA is because States and local governments usually demand companies to register any alternative name under which they do business which is called a Doing Business As (DBA) filing, this condition allows your company to legally operate under a trade name which is known as a fictitious name.
25. Can Two Businesses Have The Same DBA Name?
It is not really proper for two businesses to have the same DBA name, each name needs to be filed separately. Because multiple DBA names can negatively influenced the company.
26. What Is An Llc Operating Agreement, And How Does It Benefit You?
An LLC operating agreement is a legal document which summarizes the ownership and member duties of your limited liability company.
The benefit is allows you to set out the financial and working relationship among business owners (members) and also between members and managers.
27. What Is A Business Statement Of Purpose For An LLC Or Corporation?
A purpose statement is a means to answer the question of why a company (LLC) exists. And it also reveals to the consumers if you are trying to make the world a better place and provide an avenue for people to be well fed. A purpose statement is important because it gives you something to work toward and determines your overall purpose for being in the business.
28. What Does A DBA Intend To Accomplish For A Business Owner?
It intends to prevent the business owners from getting into trouble in their business operations.
29. As A Business Owner, Can You Have Multiple LLC?
Yes, it is very possible and permissible for a business owner to have multiple LLC, by using what is called (Fictitious Name Statement) to operate an additional business with a different name.
30. What Happens To The LLC And DBA When You Want To Retire And Sell The Business?
You will would be expected to formally dissolve the legal entity with your state. With a corporation, all business associates need to vote on closing the business. If your corporation hasn’t issued shares, you will need the approval of your board of directors to dissolve your business.
31. How Do Small Businesses Register DBA With State And Local Entities?
The following guidelines are how you register a small business
- Create a business entity, such as a corporation or limited liability company (LLC).
- Register the business name as a DBA
- Register the business name as a federal trademark